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Born for Business

Zumba Co-founder, Beto Perlman

Published: May 21, 2010

My great-grandfather moved from Jerusalem to Colombia at age 20 because he heard there were business opportunities there. He went from town to town selling textiles on horseback although he didn’t speak a word of Spanish.

When I was about 6, I had a watch that had a game on it. I loaned it to a classmate on weekends, and he gave me money in exchange. One weekend my mom me asked where my watch was. When I told her, she called the boy’s mother to apologize and made me return all the money. My father was proud. He said I invented renting.

It was a dangerous time in Colombia in the 1980s. Every time the government would pursue the drug dealers, they’d retaliate and bomb government buildings and public places. We’d hear the popping sounds at school. My dad owned a factory that made leather goods, and when I was 9 we were glad to live in the United States for six months while he opened a distribution center in Florida.

I moved back to the United States in 1994, and in 1998, I graduated from Babson College in Massachusetts with a B.A. in finance and information systems. Working as a management consultant for a while, I analyzed call centers for a bank to determine the effectiveness of its TV advertising. It was boring, but I learned about direct response marketing, which would come in handy later.

When I went home to Colombia to visit, my mother would rave about a fitness class she was taking with Alberto Perez, whom everyone calls Beto, that involved a dance routine set to Latin and international music.

In 1999, I created a business conference called Latin Venture with a partner, where Latin American entrepreneurs presented their business plans. I got companies like I.B.M. and Telefónica to sponsor it, and I lined up venture capitalists as speakers and panelists. We held the conference in Miami.

Then three partners and I created Spydre Labs, a business incubator for Latin American entrepreneurs with ideas for Internet businesses. We raised several million dollars and invested in the start-ups we created.

Then the tech bubble burst, funding dried up, and I had to let everyone go. I decided to return what remained of the investors’ money because my father always taught me that if you’re honest and respectful, it will come back to you tenfold.

My parents had moved to Miami by then, and I had dinner at their house that night. My mother suggested that I talk to Beto about starting a business related to his fitness routine. He had also moved to Florida and was giving fitness classes here.

He and I met and discovered that neither of us had any money. We decided to start a company anyway, and I asked Alberto Aghion, one of my best friends from childhood, to join us. We wanted to sell home fitness videos directly to consumers, so one night we set up on the beach and had a videographer film a fitness class. We started looking for joint venture partners for producing videos we could market on television.

Along with a TV infomercial, the home videos introduced our concept to the public, and when people called wanting to be trained as instructors, the company took off. Zumba Fitness is now in about 50,000 locations in 75 countries. This year we’re introducing a game for Nintendo Wii, Xbox and PlayStation.

I’ve learned that if you don’t take a risk, that’s a risk in itself. I’ve also learned that your customers are your boss. Our main customers are our instructors, who pay for training. They have their own community on our site, and I listen carefully when they tell me what we need to do in the future.

It took four trips from his native Colombia to Miami before Beto Perez got his big break. The fitness and dance instructor simply wanted to bring his workout classes to America. But with little money and even less English, he couldn’t get fitness-center managers to watch his Latin-dance-inspired videos.

Beto Perez Zumba Contra Costa

Finally, in 1999, one manager said, “Teach me.” Caught off guard, Perez asked, “Only you?” Yes, she said. It was 3 p.m., and the gym was empty. Soon a passerby wandered in to watch, then two, three, four. “After 20 minutes,” says Perez, “I had about 15 people. They thought it was a new class and wanted to sign up.” Recognizing Perez’s sharp choreography, charisma, and energy, the manager invited him to teach a Saturday morning class.

But on the first day of class, Perez got stuck in traffic. “I was ten minutes late,” he says. “I didn’t know how to say ‘I’m sorry,’ but I played the music, and they loved it.”

That tends to be the reaction to Perez’s fitness program, called Zumba (pronounced “zoom-ba”). The hour-long classes alternate easy-to-follow fast dance moves with slower ones for an interval-training workout that tones muscles and burns hundreds of calories. When the music starts pumping—salsa, merengue, reggaeton—people forget they’re exercising. And that just may be the secret to Zumba’s success.

Ten years later, five million people take classes every week from 30,000 certified instructors in 75 countries, from Canada to China. More than four million DVDs have been sold, and Zumbawear has taken off (the $64.95 cargo pants are the top seller).

Perez, 39, is now creative director of the privately held Zumba Fitness. His success is all the more impressive given the obstacles he’s overcome. Raised in Cali, Colombia, by a single mother, Alberto “Beto” Perez was just 14 when his mom was injured by a stray bullet. To help support them, he worked three jobs.

All the while, he dreamed of turning his passion—dance—into something more, but he couldn’t afford lessons. (Perez says he saw the movie Grease when he was seven or eight, “and I knew I wanted to dance.”) What he lacked in formal training, though, he made up for in raw talent. At 19, he won a national lambada contest. One of Cali’s best academies called with an offer to study dance while teaching step aerobics.

One day, Perez forgot the music for his class. He had one cassette with him—Latin music he’d taped from the radio. “I improvised,” he says, “and that was the beginning of Zumba.”

Once the popular instructor got his break in Miami, would-be investors started approaching him about opening a gym. One of Perez’s students asked him to meet her son, Alberto Perlman. At 24, Perlman was doing market analysis on startups for an Internet incubator with his childhood friend Alberto Aghion (an operations guy) and watching his career options disappear with the dot-com crash. Perlman (now CEO of Zumba) hit it off with Perez immediately and recruited Aghion as COO and president.

With no money or experience, the partners needed to showcase Perez’s talents. They spent a night laying down plywood boards on Sunny Isles Beach, then invited Perez’s students to take a $20 class that they would film and show to potential investors. But after September 11, 2001, all leads dried up. Eventually, they made an infomercial, which sold about a million DVDs in six months.

When asked about revenue, Perlman is tight-lipped: “We don’t disclose figures, but it’s in the many millions.” The partners say they’ve barely tapped the possibilities for the business. “We’re releasing a Nintendo Wii game in 2010 and adding to our Zumbawear line,” says Perez. “Expect to see our first sneakers soon!”